AN EVALUATION OF THE IMPACT OF ADVERTISING ON CONSUMER BEHAVIOUR

CHAPTER ONE 

INTRODUCTION 

1.1  BACKGROUND OF THE STUDY 

We  are  in  a  very  dynamic  and  complex  world.  The  business  environment  is  becoming   sophisticated  day  by  day  and  a  s  such,  decision  -  making  is  becoming  more  and  more   challenging and risky. Business organizations are failing due to poor   decisions. Investors are   losing their money and are unhappy. They are being discouraged and this is quite unhealthy   to  the  economy.  In  some  other  instances,  organizations  are  springing  up  in  great  numbers;   some are successful in the marketing of their prod  ucts and services, while others are   still  akin   to  the  barber’s  chair  syndrome  where  all  is  motion  but  no  movement;  struggling  to  reach   their target  audience. Consumers  are  also  faced  with  the  ch  allenge of  choice  making due  to   indecisiveness, skepticism, in  difference and confusion which are among the key sales killers   in business world.  However, the consumer  perception  challenge  is  the  first  and  greatest hurdle  that  advertisers   must  cross.  Perception  guides  all  activities  of  the  consumer  from  the  people  he  associates   with to the product he buys.  In the business world, it has always been what people say about   a  product or  service  and not what the marketer says.  How  a consumer perceives  each of  the   different  brands  in  a  category,  determines  which  brand  he  cho  oses. So  many  companies   spend so  much money on  advertising,  sales promotion, point of  purchase displays and other   marketing  communications  only  to  discover  that  many  people  don’t  even  remember  the   product  or  the  promotion.   On  the  other  hand,  whether  consum  ers  ultimately  purchase  the   marketer’s  brand  also  depends  on  whether  the  promotion  and  marketing  communication   variables facilitate purchasing. 

Today,  it  is  no  longer  news  that  we  are  in  a  season of  economic  anomie  .  All  that  could  go   wrong  have  been   going  wrong  with  the  global  economies  and  having  ripple  effects  on  our   local business environment.   Reports about the current economic crisis have been terrific and   scaring. More companies are recently reported to have shut down operations while some are   p  lanning  their  exit  from  the  Country  due  to  harsh  economic  conditions.   In  the  face  of  all   these,  the few others in operation are engaged  in fierce battle for the soul of the consumers. To  succeed,  they  need  to  understand  what  makes  potential  customers  behav  e  the  way  they   do.  This  study  therefore,  seeks  to  ev  aluate  the  impact  of  advertisement  of  indomie  noodles  ,  a   product  of  De  -  u  nited  Ltd  on  Consumer  behavior  .  The  brand  indomie  with  its  varieties  of   flavours  such  as  Onion  flavor,  chicken  flavor,  Suya  flavour  has  become  a  household  name   since the late 90s that even a child of 2years of age could pronounce it so fluent amidst other   competing bra  nds like Chikki noodles, ‘O’ noo  dles  , Mimi noodles  of May & Baker and now   the  latest  of  them  all,  the  Golden  Penny  n  oo  dles  of  Flour  Mills  Plc  .   With  these  range  of   competing  products  ,  massive  advertising  budget  becomes  necessary  for  the  indomie  brand,   which  the  researcher  tends  to  evalu  ate  its  impact  on  the  behavior  and/or  perception  of  the   consumers  . 

1.1.1  BRIEF HISTORY OF   DE  -  UNITED  FOOD INDUSTRIES LTD 

De-united  food  Industries  limited  was  commissioned  in  Nigeria  in  1995  as  the  first  instant   noodles  manufacturing  company  with  head  office  in  Ota,  Ogun  State.  The  company  is  a  joint   venture between Salim group of Indonesia and   Tolaram group of Singapore.    Salim  group   is  the  majority  shareholder  of  PT  Indofood  Sukses  Makmur,  a  listed  company  in   Indonesia  which  owns  the  indomie  trademark  ,  technology  and  expertise  in  instant  noodles   manufacturing.  Tolaram group  is a Singapore base  d group  that has businesses  in  Nigeria and eleven  countries   around the world.  According  to  Mr.  Ashish  Checker,  chief  operating  officer  of  De  -  united,  the  vision  of  the   company is to become a leading instant noodles manufacturer in Africa, committed to custo  mers’   satisfaction through a variety of products; increase stakeholder’ value and continuously develop   its  huma  n  capital  and  the  community.  The  company’s  mission  statement  also  reads  thus  “To   dominate  the  instant  noodles  market  by  providing  a  variety  of  qu  ality  products  that  meet   customers’ satisfaction  ”  . 

1.2  STATEMENT OF  PROBLEMS 

Advertising is costly; often its effects are uncertain, and sometimes it takes a while before it   makes  any  impact  on  consumers’  buying  behavior.  It  is  for  these  reasons  that  many   co  mpanies  think  it  appropriate,  occasionally  to  reduce  expenditures  on  advertising  or  t  o   entirely eliminate it  .  On  the other hand, some  companies  sometimes consider  it unnecessary   to  advertise  when  their  brands  are  already  enjoying  great  success  without  adve  rtisement.   Such  behavior  implicitly  fails  to  consider  the  fact  that  advertising  is  not  just  a  current   expense or mere exercise but an   investment.  Competition  poses  another  problem  area of  this  study.  Prior  to  year  20  04,  indomie  was  the   only  noodle  s  in  th  e  market  ,  whi  ch  means,  absence  of  competition 

Given  this  situation  ,  the   product   recorded   high   sales   within   the   afore  -  mentioned   period.   Today,   the   massive   introduction  of  the  noodles  earlier  mentioned  had  made  way  for  competition  as  so  many   women who used   to sell only indomie noodles now   share their resources among the different   brands in order to maximize profit.  Also, identified was in the area of children who are seen   as  the  chief  consumers  of  indomie  noodles.  Before  now,  the  indomie  jingles  (indomie, indomie  noodles,  delicious  and  tasty  ...............)  was  sang  often  among  them.   Today,   it’s  amazing  how  these  children  n  o  w  sing  the  mimi  noodles  jingles  more  than  the   popular  i  ndomie  jingles  .  This  means  that  perhaps,  these  children  hear  more  of  the  mimi   jing  les  than  that  of  indomie,  and  as  a  result,  a  good  percentage  of  them  would  no  doubt   change  from  consumption  of  indomie  to  mimi.  All  these,  have  resulted  in  low  sales  of   indomie noodles. 

1.3  OBJECTIVES  OF THE STUDY 

This study is guided by  the following object  ives. 

1.  To determine the role of advertisement in marketing of consumer goods 

2.  To  understand   consumers’  views  and  or  opinions  towards  advertisement  of  consumer   products  in general and indomie noodles in particular. 

3.  To  measure  the  extent  to  which  advertisemen  t  influences  the  behavior  of  consumers  of   indomie noodles. 

4.  To ascertain   if  a consumer good can  overcome competition without advertisement 

5.  To  determine  if  advertisement  increases consumer’s    preference of  a  particular  product   to others 

6.  To ascertain  which m  edium of  advertisement   will make  greater  impact  in   advertisement   of consumer goods 

1.4  RESEARCH QUESTIONS 

This study seeks to address the following questions: 

  Is  advertisement  an  effective  tool  in  marketing  of  indomie  noodles  or  just  a  mere   excercise? 

  To  w  hat  extent  do  other  promotional  activities  undertaken  by  the  company  impact   positively on the consumers of the product? 

  Are there step  s taken to ascertain the impact  of advertisement of  Indomie noodles on   consumers? 

  Has advertisement improved consumer pref  erence for the product to other noodles?  

  Has the company been able to overcome competition through advertisement?  

  Did advertisement play any role in defusing the bad publicity that was associated with   the poisonous indomie in 2005? 

1.5  STATEMENT OF HYPOTHESES 

In this work, effort has been geared towards propounding three hypotheses, viz:    

  HO  1  :   Advertisement has not improved consumer preference for Indomie   noodles to other brands. 

  HO  2  :   There has not been significant increase in sales  of Indomie noodles   as a result of advert. 

  HO  3  :   De  -  united has not been able to overcome its competitors through  advertising 

1.6  SIGNIFICANCE OF THE STUDY 

In  this  work,  attempt  has  been  made  to  identify  its  significance  to:  Busines  s  organizations,   Academics and the Researcher.  16  Busine  s  ss Organizations:  The need  for  prudent management of  financial resources  in an   organization  is of  great  concern.   It’s  amazing  however;  that  at  anytime  an  organization  is  going  through  some  hard  times   f  inancially,  first  thing  that  runs  into  the  mind  of  the  management  staff  is  a  cut  -  down  on   advertisement  and  promotion  budget  or  eliminate  them  entirely  as  a  step  to  ameliorate  their   predicament.  This  study  therefore,  has  been  designed  in  such  a  way   as  to  ai  d  organizational   managers realize that measurement is very important in advertising.

Therefore, before decisions   are  taken on  whether to eliminate advertisement or  cut  -  down the budgets, efforts  must be  made   towards ascertaining the impact of such advertise  ment, hence;   a call for checks and balances.  To   Academics:   Before  this  study,  some  past  studies  found  that  advert  had  increasing  effect  on  consumer   satisfaction;  others   found that advert had negative impact  and led to consumer dissatisfaction. No   researc  h  has  ever  found  why  conflicting  results  were  obtained  in  this  area  of  research.  To   academics therefore, this work will provide a basis for further research works. To further achieve   this, relevant and authentic referenc  es have been c  ited.  To the Research  er:   The  researcher  is  an  advertising   practitioner;  hence,  embarking  on  this  work  will   increase  his   knowledge   of   media  plann  ing.  Above  all  ,  this  study  is  designed  in  partial  fulfillment  of  the   requirements  for  the  award  of  a  master  degree  of  the  department  of  marketing,  University  of   Nigeria, Enugu Campus.   

1.7  SCOPE OF THE STUDY 

This study  was carried out only in  Lagos State  and  the  markets  within the state apart  from  few   visits  made to  the company  in Ogun  State. The study  is limited to  De  -  united  Industr  ies Ltd  and   its products indomie noodles. However, efforts were made to identify other competing brands of   noodles such as Mimi noodles, Chikki noodles, O’ noodles and the golden penny noodles and at   the end, conclusive reports were drawn for the success o  f this work.   

1.8  LIMITATIONS OF THE STUDY 

The  researcher’s   efforts   to   obtain   intensive   and   conclusive   information   necessary   for   a   comprehensive work on this study were restrained by the following; 

  Attitude  of  Respondents:  Most  of  the  responsible  officials   of  De  -  United  were   reluctant  to  divulge  some  vital  information  which  they  claimed  might  be  used  in   favour  of  their  competitors.  The  high  level  of  illiteracy  amongst  the  market  woman   who  sell  indomie  noodles  poised  another  threat,  in  that  some  of  these  woman  felt   being  disturbed  in  their  businesses  and  were  not  ready  to  waste  their  time  in   answering questions that would not profit them. On the other hand, other individuals   who sell both indomie noodles and other noodles were just indecisive. 

  Cost:  Efforts to  obtain expensive but very relevant materials were not met due to lack   of  sufficient  fund.  This  factor  also  restricted  the  researcher’s  study  in  only  Lagos   State, apart from  few visits to the company in Ogun State, as he could not afford the   high transport  ation cost of visiting other areas. Most of the visits in some areas were   made on motorcycle with its attendant risks. 

  Time:  It  was  also  very  difficult  for  the  researcher  to  combine  this  work  with  his   official duties in the place of work. Sometimes, the f  ew hours permission he got from   his superior officer in the office were not enough to carry out a comprehensive study   for  this  topic.  Another  time  constraint  was  in  the  area  of  some  respondents  giving   attention at their convenience and as a result, the res  earcher was often asked to come   back next time for attention. 

1.9  DEFINITION OF TERMS 

Advertising  :   According to  Arens (2004:7),  advertising  is the structured  and composed non  -  personal  communication  of  information,  usually  paid  for  and  usually  persuasive  in  nature,   about products (goods, services or ideas) by identified sponsors through various media 

Consumers:  are  people  who  purchase  and use  goods  or  services  to  satisfy  particular  needs   and wants. 

Consumer  behavior:  are  those  acts  of  individuals  directly  in  volved  in  obtaining  and  using   economic goods and services. (Nwaizugbo 2004:66) 

Perception:  this  refers  to  the  personalized  way   people  sense,  interpret  and  comprehend   various stimuli.  Impact:  The  Oxford  Advanced  Learners  Dictionary  defines  impact  as  the  powerful  effect   that something has on something or somebody. 

Market:  the  set  of  all  actual  and  potential  buyers  of  a  product  or  service.  Kotler  and   Armstrong (2007:7)  . 

Brand:  This is a name, term, symbol, design, mark or a combination of these that identifies   the  product  of  a  manufacturer  or   differentiates  it  from  those  of  competitors.  Nwaizugbo  (2004:113) 

Brand  Equity  :  this  refers  to  the  added  value  endowed  to  products  and  services.  Kotler  &   Keller (  2006:276) 

Brand  promise:  Is  the  marketer’s  vision  of  what  the brand  must  be  and  do  for  consumers.   Kotler & Keller (2006:278). 

Brand Interest:   An individual’s   openness or curiosity about a brand 

Brand  awareness:  Is  an  issue  of  whether  a  brand  name  comes  to  mind  when  consumers   think about a particular pr  oduct category and the ease with which the name is evoked. Shimp   (2000:8)